How does Turkiye payroll tax work in 2026?
SGK employer contributions in Turkiye run at 23.75% of gross earnings, one of the highest employer payroll rates in the region. On top of that, income tax starts at 15% from the first lira, with no personal allowance. The minimum wage is exempt by a separate provision, not a zero band.
· Turkiye guide
Illustration · Istanbul, Turkiye
SGK employer contributions in Turkiye are 23.75% of gross wages. The employee pays 15%. Both rates apply up to a monthly earnings ceiling of nine times the minimum wage.
Income tax has five bands. The rate starts at 15% from the first lira and rises to 40% above TRY 5,300,000 a year. There is no general personal allowance. Minimum wage income is exempt by a separate rule.
Payroll is filed monthly. The combined withholding tax and social security declaration goes to the tax authority by the 26th of the following month.
Turkiye also has a mandatory auto-enrolment private pension scheme called BES. Employees contribute 3% of their social security base. There is no mandatory employer contribution to BES.
What does an employer pay in Turkiye SGK contributions?
The employer pays 23.75% of the employee's gross wage into the SGK social insurance system.
That rate covers invalidity, old-age, and death insurance at 12%, general health insurance at 7.5%, short-term insurance at 2.25%, and unemployment insurance at 2%.
| SGK component | Employer rate |
|---|---|
| Invalidity / old-age / death | 12% |
| General health insurance | 7.5% |
| Short-term insurance (workplace accident, occupational disease) | 2.25% |
| Unemployment insurance | 2% |
| Total employer SGK (standard rate) | 23.75% |
Earnings ceiling
SGK contributions apply up to a monthly earnings ceiling of nine times the minimum wage. Earnings above that ceiling are not subject to SGK contributions. The ceiling adjusts when the minimum wage changes, so it moves at least once a year and may move mid-year if a mid-year minimum wage review occurs.
Sector incentives
Several employer SGK incentives are available under Turkish law. Manufacturing businesses qualified for a 5-point reduction through 31 December 2026, bringing the effective employer rate to 18.75%. Other eligible businesses qualified for a 2-point reduction, giving 21.75%. The headline rate of 23.75% applies where no incentive is active. Teamed tracks incentive eligibility and applies the correct rate to your payroll from day one.
The standard employer SGK rate for 2026 is 23.75% of gross earnings, comprising invalidity/old-age/death (12%), general health (7.5%), short-term insurance (2.25%), and unemployment (2%). The rate was raised from 22.75% to 23.75% by Law No. 7566, effective 1 January 2026.
Source: Vergi Merkezi: Turkey Payroll 2026, SGK Rates and Employer Cost Guide
What does an employee pay in Turkiye SGK contributions?
The employee pays 15% of gross earnings into SGK.
That covers invalidity, old-age, and death insurance at 9%, general health insurance at 5%, and unemployment insurance at 1%.
| SGK component | Employee rate |
|---|---|
| Invalidity / old-age / death | 9% |
| General health insurance | 5% |
| Unemployment insurance | 1% |
| Total employee SGK | 15% |
Employee SGK contributions are calculated on the same gross earnings base as the employer rate, up to the same monthly ceiling of nine times the minimum wage. Amounts above the ceiling attract no further employee SGK deduction.
SGK contributions are deducted from gross pay before income tax is calculated. They reduce the employee's income-tax base, which matters at higher salary levels where the top income-tax bands apply.
Turkiye income tax bands for 2026
Income tax in Turkiye has five bands. The lowest rate is 15% on the first TRY 190,000 of annual taxable income. The top rate is 40% above TRY 5,300,000.
There is no personal allowance or zero-rate band. Tax starts from the first lira of taxable income. Minimum wage earnings are exempt by a separate provision, not a zero band.
| Annual taxable income (TRY) | Rate |
|---|---|
| TRY 0 to TRY 190,000 | 15% |
| TRY 190,000 to TRY 400,000 | 20% |
| TRY 400,000 to TRY 1,500,000 | 27% |
| TRY 1,500,000 to TRY 5,300,000 | 35% |
| Above TRY 5,300,000 | 40% |
How the income-tax base is calculated
The income-tax base is gross earnings minus the employee SGK deduction of 15%. Minimum wage income is excluded from the base entirely by a statutory provision in Income Tax Law No. 193. For employees earning above minimum wage, only the portion above the minimum wage equivalent is subject to income tax.
Withholding by the employer
The employer withholds income tax via the payroll under the cumulative (kümülatif) method. Tax is calculated on the running total of taxable income for the calendar year, so the effective rate rises through the year as annual earnings accumulate into higher bands. This is different from month-by-month flat-rate calculations and it means an employee's net pay may vary through the year even on a fixed salary.
Income tax bands are updated annually by the Revenue Administration (GIB) via communique. The 2026 bands apply to income earned from 1 January 2026 (Income Tax General Communique No. 332, Official Gazette 31 December 2025).
How does the Turkiye muhtasar payroll filing system work?
Employers in Turkiye file a combined declaration called the muhtasar ve prim hizmet beyannamesi each month.
This single form reports withheld income tax, stamp duty, and the monthly SGK social security data for every employee. It is filed and paid by the 26th of the following month.
The muhtasar declaration replaced separate withholding tax and social security filings. Employers now submit one integrated return to the tax authority (Gelir Idaresi Baskanligi, GIB) covering both income tax withholding and SGK premium declarations.
What the monthly declaration includes
- Income tax withheld from each employee under the cumulative method
- Stamp duty withheld from payslips (0.759% of gross wage)
- SGK premium data: days worked, earnings base, and contribution amounts for each insured employee
Payment timing
The declaration is submitted and the associated tax is paid by the 26th of the month following the payroll period. SGK contribution payments follow the same monthly cycle. Late or missing filings attract administrative penalties and interest under Tax Procedure Law.
Payroll documentation
Each employee must receive a payslip each month. The payslip must show gross wages, SGK deductions, income tax withheld, stamp duty, and net pay. Employers must keep payroll records for ten years.
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Collect pay data for the month
Gather base salary, variable pay, and any allowances for the payroll period. Include all amounts that form part of the SGK earnings base.
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Calculate gross and SGK base
Total all earnings. Apply the monthly SGK earnings ceiling. Amounts above nine times the minimum wage are excluded from the SGK base but remain taxable for income tax.
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Deduct employee SGK and BES
Deduct 15% employee SGK from gross earnings up to the ceiling. Deduct 3% BES contribution from the SGK base for enrolled employees.
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Calculate income tax using cumulative method
Add this month's taxable income to the year-to-date cumulative total. Apply the five-band rate table to the cumulative figure. Deduct the tax already paid in prior months of the year. The remainder is this month's withholding.
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Calculate employer SGK
Apply the 23.75% employer SGK rate to the employee's earnings up to the monthly ceiling. Record any applicable sector incentive that reduces the effective rate.
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Submit muhtasar declaration and pay
File the combined muhtasar ve prim hizmet beyannamesi by the 26th of the following month. Pay withheld income tax, stamp duty, and SGK contributions to the relevant authorities at the same time.
BES auto-enrolment in the Turkiye payroll stack
All employees in Turkiye are automatically enrolled in the private pension system, BES, from their first day at work.
The employee contributes 3% of their social security base each month. There is no mandatory employer contribution to BES.
BES stands for Bireysel Emeklilik Sistemi. It is a state-supervised individual pension savings scheme governed by Law No. 4632 and the 2017 auto-enrolment regulation. It sits alongside, and is entirely separate from, SGK social insurance.
How auto-enrolment works
- Employees aged 45 or under at the date of hiring are automatically enrolled. Employees over 45 are enrolled only if they choose to opt in.
- The contribution of 3% is deducted from gross earnings and paid to the approved pension company by the employer.
- The state adds a 20% subsidy on contributions, paid directly into the employee's fund account.
- Employees may opt out within the first two months of enrolment. If they opt out, all contributions are refunded within 10 working days. After the two-month window, they remain enrolled.
No mandatory employer contribution
Unlike UK auto-enrolment, Turkiye's BES system carries no mandatory employer contribution rate. The employer's role is administrative: collect the employee deduction, remit it to the pension company, and maintain enrolment records. Some employers choose to match or supplement contributions as a benefit; that is discretionary.
SGK retirement versus BES
BES is a supplementary savings layer on top of the SGK state pension. SGK contributions fund the pay-as-you-go state retirement system. BES funds go into individual accounts and are invested by licensed pension companies under the supervision of the Capital Markets Board (SPK) and the Insurance and Private Pension Regulation and Supervision Agency (SEDDK).
How does Teamed handle Turkiye payroll for you?
Teamed becomes your legal employer of record in Turkiye for from $599 per employee per month, with zero FX mark-up in any currency.
Payroll, SGK filings, BES enrolment, and the full Turkiye employment law stack run on one platform.
Real HR and legal experts handle your Turkiye hires from the first offer letter through every monthly muhtasar declaration and annual reconciliation. An actual person, not a chatbot or a pooled queue. There is no setup fee and no exit fee. Employer cost passes through at cost, itemised on every invoice.
EOR payroll, contractor onboarding, and entity setup all live on one platform. A Turkiye contractor who converts to payroll keeps their record. That same employee can graduate from EOR to your own Turkiye entity without switching systems. Run the Employer Cost Calculator to see the full picture. EOR is the right model for a first Turkiye hire, until it isn’t. Start from the Turkiye hiring overview.
Key sources: Sadik Sozer Cizmeci: Payroll Parameters in Turkey 2026, Vergi Merkezi: SGK Rates and Employer Cost Guide 2026, and PwC Worldwide Tax Summaries: Turkey 2026.
Frequently asked questions
What is the SGK employer contribution rate in Turkiye in 2026?
The standard SGK employer rate is 23.75% of gross earnings. The rate covers invalidity, old-age, and death insurance (12%), general health insurance (7.5%), short-term insurance (2.25%), and unemployment insurance (2%). The rate rose from 22.75% to 23.75% by Law No. 7566, effective 1 January 2026. Contributions apply up to a monthly ceiling of nine times the minimum wage. Manufacturing and other qualifying businesses may be eligible for sector-specific reductions.
What SGK does a Turkiye employee pay in 2026?
The employee pays 15% of gross earnings into SGK. That covers invalidity, old-age, and death insurance (9%), general health insurance (5%), and unemployment insurance (1%). The same monthly ceiling applies as for the employer: contributions stop once earnings reach nine times the minimum wage. Employee SGK is deducted before income tax, reducing the taxable base.
What are the income tax bands in Turkiye for 2026?
There are five bands. The first TRY 190,000 of annual taxable income is taxed at 15%. From TRY 190,000 to TRY 400,000 the rate is 20%. From TRY 400,000 to TRY 1,500,000 the rate is 27%. From TRY 1,500,000 to TRY 5,300,000 the rate is 35%. Above TRY 5,300,000 the top rate of 40% applies. There is no personal allowance. Minimum wage income is exempt by a separate statutory provision.
How does payroll filing work in Turkiye?
Employers file a combined monthly declaration called the muhtasar ve prim hizmet beyannamesi. This single form covers withheld income tax, stamp duty on payslips, and SGK premium data for each employee. It is submitted and paid by the 26th of the following month. The cumulative income-tax method means the employer recalculates the withholding each month based on the employee's year-to-date total taxable earnings.
What is the BES pension auto-enrolment rule in Turkiye?
All employees aged 45 or under are automatically enrolled in BES, the private pension scheme, from their first day of work. The employee contributes 3% of their social security base each month. The state adds a 20% subsidy on contributions. There is no mandatory employer contribution. Employees may opt out within the first two months and receive a refund. BES is separate from SGK social insurance and does not replace it.
The number that surprises most clients is the combined SGK burden: add the employer rate to the employee rate and you are looking at nearly 39% of gross wages going to social insurance before income tax even starts. That changes how you structure a compensation package for Turkiye. Get the gross-to-net modelled before the offer goes out, not after.
Turkiye employer SGK sits at 23.75%. Income tax starts at 15% from the first lira, with no personal allowance. The cost structure here is different from anywhere else in the region.
Add the BES pension deduction and the cumulative income-tax calculation, and the gross-to-net for a senior hire needs to be worked through carefully before the offer is made.
Know the numbers before you commit.
